The price of Platinum also came under pressure in the wake of the correction in Gold and Silver, Commerzbank's commodity analyst Carsten Fritsch notes.

China abolishes tax rebate for Platinum imports

"In contrast to the two precious metals mentioned, Platinum has recovered most of its losses and is trading at around $1,610 per troy ounce this morning. This is just $120 short of the 12½-year high recorded a week ago. The continued significant undervaluation of Platinum relative to Gold is likely to have prevented a sharper price decline and contributed to the quick recovery. However, an impending change in tax legislation in China may also have played a role."

"A week ago, China announced that it would abolish the existing tax rebate on the sales of domestically produced and imported Platinum as of November 1. This means that a 13% tax will be levied starting next month. The announcement caused the price of Platinum on the Shanghai Gold Exchange to rise significantly above the world market price, creating an incentive to import before the tax legislation comes into force."

"After that, however, China's demand for Platinum is likely to slow considerably, which could have a negative impact on the price of Platinum. According to the World Platinum Investment Council, China has accounted for more than 30% of global Platinum demand over the past three years."